Economic Environment of Indian Business Sector

Business is the crucial sector of the economy. It shares a huge part of the pie. Economic environment creates a framework for the organizations to operate. The economic environment facilitates a smooth working area to business. Business environment indispensable part of the economy, though it's proper implementation economy attain the majority of GDP growth and National Income and other concerned milestones.

The Analyses of Indian Economy 

The economic environment of India is framed of major macro levels decisions. Being a Mixed economy India serves facilities to both Public and private sector as well. They are majorly related to the production and distribution of wealth, which decision ultimately impacts the working of the business sector of the economy. Business has the responsibility to cater economy in such a way so, it could reach the goals in the global market. Similarly, the economy has a liability to provide an efficient working environment for the desired output.

The contents of Indian Economic Environment: 

1. The major economic policies which include monetary, fiscal and industrial policies.
2.  Economic planning is also part of the economic environment which involves Five-year plans, Annual Budgets, Plans for MSME's, Made in India and so on.
3. Providing opportunities to public and private sectors to grow significantly by following mixed economic structure.
4. Accessing Infrastructural, Transportation and Communication facilities to ensure the growth of the economic environment.
5. Economic Environment essentials are National Income, growth of GDP, Per Capita Income rise in Personal Income, rise in net Disposable Income, Increasing of exports over imports, rise in Forex, Rate of savings and investments, Balance of Payment and many more.

The Economic Reform and Economic Environment 

 

Economic reforms introduced By Government of India in 1991 July. The Iconic decision brought millions of change to each and every sector of Indian Economy. Here, the Government of India comes with a new industrial policy in 1991. The reforms were as follows:

1. Government liberalised the rules for foreign capital. The share of foreign capital was increased and even 100 per cent FDI ( Foreign Direct Investment) approved.
2. LPG policy brought an invasion of technology in the Indian economy with foreign entry in the Indian market.
3. Disinvestment initiated by Indian economy in public sectors by Government of India.
4. Public sector kept reserved to under full control of Govt. of India
5. Government of India reduced the number of industries under compulsory licensing to six.
6. Foreign Investment Promotion Board set up to promote and invite foreign investment ion Indian economy.

(LPG)  industrial policy was introduced to give wing of expansion to the Indian Economy. Moreover, Government took every step to reduce the hurdles for foreign business to employ their funds in Indian Economy. Liberal rules and private sectors gave a kickstart to the GDP of the Indian Economy.

LPG  The essence of Industrial Policy 

The three pillars of development LPG Introduced in industrial policy 1991 i.e, Liberalisation, Privatisation, Globalisation 

Liberalisation 

Economic reforms made the rules and entry of the foreign firm in the Indian economy. Indian economy came up with the liberal policy to enter any enterprises easily. All the unnecessary restriction and controls removed. The end of licence permit quota raj introduced. Reduction of taxes, freedom of fixing prices of goods and services, simplified procedures, flexible rules attracted FDI.

Privatisation

Government started disinvesting public sector for FDI to invest in them. Which revived sick units of Indian economy and uplifted the economy. Many important sectors of economy transferred to private. Privatisation brought better customers service and upgraded product and services. Privatisation introduced a standard of living among Indian Economy.

Globalization 

Globalization brings the world to your doorstep. Globalizing Indian market was the best decision took by in Industrial Policy 1991. It introduced the Indian economy to the world and vice versa. Technological advancements, quality goods, high-end services, foreign exchange, imports and exports gave a boost to GDP. In such a way India attained a reputation in Global market.

Although, this globalization is also seeking negative impacts now in 2020. Indian economy is creating an image of dependent on the global market for product and services. The revolution of Make in India is seeking rise to reduce the dependency on the foreign market.

 

Importance of economic environment 

 

Indian Government values the importance of the economic environment. In the same way, Business tends to transparent the working process and output. Annual audits and reports to be made public and declare their share of profit to the economy. Almost, all annual company reports presented by the CEO of the Business sneaks the attention of economic environment. 

Economic environment emphasis on the overall development of the economy along with the upliftment of business enterprises. The framework of operation standardized the level of every sector of the economy. From lower-level employee to BOD of an organization gets involved in this framework. The economic environment process normal keeping in minds all sectors of fields.

The economic environment is the skeleton support of Business enterprises of the Indian economy. The economic environment provides operational support and delegates with the required facilities to business organisations.

It facilitates the free flow of goods and services along the national and international borders. It introduces the very fine and super-fast technology. The overall development of an economy relies on the economic environment provided by the nation.

 

What Is your perception of the economic environment?